During economic downturns, the Supplemental Nutrition Assistance Program (SNAP, formerly, Food Stamps) provides an important boost to the economy as well as to those who are hungry. SNAP benefits allow people who become unemployed and underemployed to keep food on the table, and the money that SNAP recipients spend at grocery stores allows those stores to keep more of their employees on the payroll for more hours. As a result, SNAP gave the greatest dollar-for-dollar boost to the American economy of any government program during the 2008-10 Great Recession.
The U.S. Department of Agriculture (USDA) estimates that because SNAP benefits tend to be spent very quickly by recipients and to free up recipients other resources for other pressing needs, every $1 of SNAP benefits issued results in $1.54 of new economic activity. This is why Louisiana should take immediate steps to maximize SNAP distribution as the state braces for the economic downturn that is almost certain to result from the current pandemic.
Specifically, Louisiana should consider:
Coronavirus and falling oil prices threaten Louisiana’s economy
Louisiana’s economy – heavily dependent on oil production and tourism – faces a dire threat from the spread of the novel coronavirus and the sudden plunge in global oil prices.
Efforts by public health authorities to limit the spread of the virus through “social distancing” are essential to slowing the progress of the pandemic, potentially avoiding a situation in which hospitals are overwhelmed by a sudden surge in very ill people seeking care. But these necessary efforts come with economic costs that will be heaviest for Louisiana’s lowest-paid and most vulnerable workers.
Health care, retail and hospitality (such as hotels and food service) make up the three largest sectors of Louisiana’s economy, and account for more than 3 of every 4 jobs in the state. Many of these jobs also come with the state’s lowest average weekly wages.
Workers in these industries are particularly vulnerable to economic losses when people follow the advice of public health authorities and stay home. The workers who are most at risk of being laid off or having their hours reduced are also likely to have the least money saved to cushion those impacts.
As a public health and economic crisis looms, the public programs that help people meet their basic needs are more important than ever for Louisiana’s low-wage workers and their families. We should make these programs as easily accessible as possible to ensure that all Louisianans can weather the economic effects of this pandemic.
New federal rules changes make SNAP less responsive to recessions
Unfortunately, recent changes to SNAP rules implemented by President Donald Trump’s administration have made SNAP less responsive to recessions than the program has been in the past. Other rules that the administration has proposed but has not yet implemented — removing flexibilities that allowed states to provide SNAP to people with modest savings and people with moderate income but medical or housing costs that drove them into poverty — also reduce the program’s ability to serve people who have experienced a sudden change in their economic circumstances.
Since 1996, federal SNAP rules have imposed a time limit of three months of benefits in every three years for SNAP recipients aged 18-49 without children or disabilities who aren’t able to report at least 80 hours of work, volunteering, or training each month. Because Louisiana’s unemployment rate has been substantially higher than the national average throughout that period, the state has received an exemption from those rules for nearly the entire time they’ve been in effect.
But starting April 1, most Louisiana parishes will lose their waiver from the SNAP time limit, subjecting more than 40,000 Louisianans to a harsh benefit cut-off. This may happen while businesses reeling from a coronavirus slowdown are reluctant to hire, making it increasingly difficult for those individuals to satisfy the rule’s work-hour requirements. Louisiana’s Department of Children and Family Services can mitigate the harm of this change by proactively screening SNAP recipients for individual exemptions to this rule, making sure that the time limit is applied as accurately as possible and limiting the number of exempt individuals who fall through the cracks.
Recent federal changes also significantly reduced states’ ability to qualify for waivers from SNAP’s harsh time limit based on evidence of rapidly worsening economic conditions, and eliminated an option that allowed states to qualify for a waiver based on the state’s use of extended unemployment benefits—another marker of a struggling labor market. Unfortunately, both of these changes make it more difficult for states to provide timely and sufficient food assistance to residents unable to find enough work in an economic crisis.
Despite these changes, Louisiana has important options to consider for maximizing SNAP’s effectiveness as a response to hunger and as an economic stimulus.
State options for maximizing SNAP’s ability to keep food on peoples’ tables during a pandemic
Feeding kids when schools close
In response to the coronavirus, Louisiana’s Department of Education has already applied for waivers to some of the regular rules for the school lunch program. These waivers allow schools to serve food to students eligible for free and reduced lunch when school is closed in response to the coronavirus, and to serve that food using a “Grab and Go” model, so that students can practice social distancing while still receiving nutritious meals. These solutions are the right approach to ensure that kids continue to have access to nutritious food and families don’t have to manage another unplanned expense of providing meals at home.
Federal action is still needed
While these state options can help Louisiana’s nutrition programs respond to the ongoing crisis and its aftereffects, action at the federal level can make this response stronger. The Hamilton Project’s Lauren Bauer and Diane Whitmore Schanzenbach offer some valuable suggestions on what federal policymakers can do to make best use of existing food assistance programs to provide relief during a coronavirus pandemic.
Many of their recommendations, including increases in the amount of nutrition assistance offered to low-income families with children and suspension of SNAP’s work-related requirements during a public health emergency are included in the Families First Coronavirus Response Act, which Congress is currently considering.